Mobile Bridges the Digital Divide

Guest Contributor

Three technological advances are giving rise to an Internet-based platform that is enabling business to reach an increasingly large segment of the world’s population. Businesses that understand and leverage these changes will be massive winners in the race for global growth, while those that ignore them do so at their own peril.

These advances can be summarized as a combination of the explosive growth of increasingly powerful, inexpensive and smart mobile devices; the rise of cloud computing, which is enabling the economical distribution of sophisticated services and apps to all those devices; and ubiquitous, broadband wireless networks linking it all together.

Together, these advances are giving rise to an Internet-based platform for digital, inclusive innovations. Inclusive innovation is a relatively new concept. It aims to develop products and services that just about everyone can afford, even those in the bottom of the pyramid– that is, the poorer socio-economic groups around the world.

Let’s look at how these three prerequisites for inclusive innovation are gaining momentum in the developing world:

There are already over 5.5 billion mobile phone subscriptions around the world and the numbers keep rising. While only a fraction of them are smartphones today–that is, built on a general computing platform with Internet access and the ability to run sophisticated software apps–those numbers are going up rapidly. It is estimated that in 2011 almost 500 millions smartphones were sold, comprising over 30% of the total number of mobile device sales. It is likely that in five years, a large majority of mobile phones will be smart.

Mobile network operators in emerging economies–like Bharti Airtel, which started in India and now has expanded to twenty or so additional countries in Africa and South Asia–have figured out how to provide cellular phone service at very low prices. Cell phone service is already being expanded to support broadband capabilities and Internet access, especially in fast growing urban environments.

Cloud computing is the third major ingredient in this emerging digital platform for inclusive innovation. It gives us the ability to deliver all kinds of information, services and apps to all those billions of mobile devices over the broadband wireless networks. In the last few years we have seen the emergence of truly massive cloud-based data centers able to handle the required volumes of transactions at very low costs. And, as we look into the future, we can expect the continuing advances in digital technologies to give us ever more powerful and economical clouds, smartphones and wireless networks.

Such a truly universal, global platform is necessary for digital, inclusive innovation, but it is far from sufficient. If we examine the Internet revolution launched 10 to 15 years ago, what was truly transformative was not just the ability to communicate and access content, but the ability to conduct transactions of all kinds. And doing so, requires that our digital platforms support a few critical enabling services, in particular the ability to uniquely establish our identity, store and manage our personal information, and deal with digital money and payments.

These enabling services have not been an issue for those who have heretofore been able to afford to access the Internet, the vast majority of whom already had unique identities and banking relationships in the physical world which they were able to transfer to the Internet-based digital platforms. However, as we now look to make these digital platforms truly inclusive, many of the people we are now trying to reach have not had unique identities or financial relationships as a result of being poor and not integrated into their countries’ economies. Digital, inclusive innovation is thus acting as a forcing function for economic inclusion in general, with a number of initiatives underway around the world to address these issues.

For example, the January 14 issue of The Economist has an article on India’s massive Unique ID (UID) initiative, known as Aadhaar. The UID project aims to issue each resident in India a 12-digit unique number, which will be stored in a centralized database and will be linked to basic demographics and biometric information. Among other benefits, Aadhaar will bring financial inclusions to the poor and underprivileged residents of India, enabling them to avail themselves of the many services provided by the government and the private sector.

As The Economist points out, “ . . . one massive problem in India is that few poor people can prove who they are. They have no passport, no driving license, no proof of address. They live in villages where multitudes share the same name. Their lack of an identity excludes them from the modern economy. They cannot open bank accounts, and no one would be so foolish as to lend them money. The government offers them all kinds of welfare, but because they lack an identity, they struggle to lay hands on what they have been promised.”

In addition, digital transactions requires a digital money ecosystem that gives everyone the ability to send and receive money. Money itself is continuing its centuries old transformation from being embodied in objects with intrinsic value, like gold and silver, to being nothing more than information in the digital wallets of our mobile devices as well as in our digital accounts someplace out there in the cloud.

Since just about everyone in the world, rich and poor alike, now has access to mobile devices, this major chapter in the history of money brings with it a universal inclusiveness that has been missing in the previous links between information technologies and money. Mobile phone-based payment services like M-PESA are already in wide use in Kenya, Tanzania and other African countries. Mobile digital money is coming–over time–to every individual in every corner of the world.

For billions around the world, these digital wallets containing their digital identities, digital money and access to cloud-based digital accounts are their ticket to inclusion in the global economy. In addition, the emergence of this Internet-based platform for inclusive innovation will usher a plethora of apps and services, many of which we can barely imagine today.

In this second article in a two-part series, Sonny Garg, senior vice president and chief information and innovation officer at Exelon Corp., the $27.4 billion competitive energy provider based in Chicago, describes the structure and inner workings of his emerging technologies team.